At around this time each year, various institutions will make a stab at next year’s tax brackets. The cycle was a little broken last year as Congress and the President waited until much later in the tax year to decide on the Bush era tax cuts (they were extended for two years). While there are a few unsettled issues this year, there aren’t any that affect the base tax brackets themselves so this fun little exercise is probably going to be accurate for next year.

The Tax Foundation took a look the Consumer Price Index for urban consumers (CPI-U) and used it to adjust the tax brackets, standard deduction, and personal exemption to give us a good look at how our brackets will look next year.

CPI-U & Calculating Brackets

According to the Bureau of Labor Statistics, inflation from Sept 2010 through August 2011 was 2.43% – that what will be used to calculate the new tax brackets. As the Tax Foundation put it, the IRS uses a “somewhat complicated formula” that isn’t that complicated. In essence, the figure out how much CPI-U has grown from the base year and adjust the value accordingly, rounding down to the nearest $50. (it’s only complicated because 2012 taxes are calculated based on Sept 2010 to Aug 2011 inflation figures… because they need time to print the forms and instructions!)

So if we know this is what they’re doing, why are these “projected” figures? The BLS can revise the August 2011 figure in October 2011, but that adjustment is most likely not going to be large enough to affect these rates (since numbers are rounded down to the closest $50). However, they could change depending on the revision.

2012 Projected Tax Brackets

Here are the projected 2012 tax tables (here are the 2011 tax brackets for comparison):

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Jeremy, not only does the liberal politicians claim those who are in a higher bracket don’t pay their share of taxes, they don’t bother to tell people about those that are in the higher bracket get cheated out of the deductions that are phased out because of being over a certain income. Those are ordinary hard working people who have earned their higher brackets. Now, in saying that, they also don’t tell you how the politicians know how to hide their money and pass laws they and only they can benefit from them because of the inside trading and other knowledge they have to make millions and eventually billions. They get a pass for criminal acts they commit. Who is going to prosecute them when they are the FOX watching the hen house. Why did GE, not pay one dime in taxes? Ask Obama and the liberal politicians, but don’t expect an honest answer. While Obama chastizes those who work for their big bucks, he is in bed with the ones who cover theirs up with dishonest loopholes. They know we can’t do anything about their theft because they are the Judge, Jury, and Proscecutors.

Jim, I am so glad that you liked my Flickr photo so much that you included it on this page.

I enjoy when people use my photos that I work hard on, but as I noted on Flickr below each photo I let people use my photos on the condition that they provide me credit to my learningdslrvideo.com site.

Jan and Jeremy, take a look at self employment tax and tell me that the rich pay their fair share. I will pay 15.3% self employment tax this year, but if I made over $106,000 then I would be paying 2.9% self employment tax.

That’s 2.9% on anything over $106,000 they still pay the same 15.3% on the first $106k. You’ll also only receive social security benefits BACK on the “tax” you paid into the social security system.

Would you prefer to not cap the limit on how much social security benefits people can be taxed on and thus RECEIVE BACK in retirement so that super millionaires could potentially be getting millions back every year from social security, which they wouldn’t need? Otherwise if you’d like people to be taxed over and above some limit, and not receive the same increment back after retirement then you’re talking about even more wealth redistribution than is already taking place.

i just receive moneys for leasing land and am wanting to know what tax brackett i will be in for this year so i know how much to save back for taxs… i receiver 70602.00 my yearly is about 21000.00 so what i just add the two together or do i have to include my husband also because before we have always filed together…

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